TaxTMI 
TaxTMI 
TaxTMI 
1998 (7) TMI 446
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....lso, on doubt, made some preliminary enquiries and found the Unit to be non-existent at the given address. It was therefore felt that the goods imported and cleared by the said firm under DEEC have been diverted and sold off in the market. 2. It was ascertained that the import clearances of this firm have been effected through M/s. H.P. Dagha & Co., Bombay, C.H.A. No. 11/374. Details of the same were collected from them and the dealing Appraising Group, which revealed that 952.032 MT of defective CR sheets/coils under 9 Bills of Entry was imported by the above firm. The Bill of Entry No. 5595, dated 17-10-1989 and 5834, dated 18-10-1989 consignments were supplied by M/s. AOI Sangyo Co. Ltd., Japan and the consignments under remaining Bill of Entries were supplied by M/s. Heisei Steel Corporation, Japan. The goods under Bill of Entries No. 9945, dated 25-9-1989 is cleared and Bill of Entry Nos. 5597 and 5598, dated 17-10-1989 were presented by the importer, but not yet assessed by the appraising group. Regarding the other Bill of Entries, the Appraising Group has assessed, but the goods are not yet cleared. 127.980 MT of goods already cleared have been kept in the Lift India W....
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....1 and 52. After obtaining the copies of the application and other documents from the office of the Joint Chief Controller of Import and Export, Bombay for the issue of Advance licence/DEEC book and on scrutiny it is revealed that the party had declared itself to be a manufacturer-exporter and had along with application submitted a copy of SSI Registration Certificate No. 11/07/18473/ PMT/SSI, dated 12-3-1979 issued from F. No. U-64/72, B. No. 89450 in the name of M/s. UMW, by the Directorate of Industries, for the manufacturing/processing activity of Sheet Metal Compound and Steel furniture. On enquiry with the office of the Joint Director of Industries, Bombay as to the genuinely of the said SSI Registration Certificate. The Dy. Director of Industries, Bombay confirmed that the above SSI Registration Certificate No. was issued to one M/s. M.G.M. Engineering Works, Gala No. 20, Sonal Indl. Estate Ramachandra Lane, Malad (W), Bombay-64 vide No. 11/07/18473/PMT/SSI, dated 9-8-1992 in the Booklet No. 22691, and the Booklet No. 89450 is issued in favour of M/s. V.R. Engineering Industries, Gala No. 301, 3rd Floor, Sanghavi Indl. Est., Mahatma Gandhi Road, Kandivli (W), Mumbai-400 067 f....
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....rks, who is manufacturing plastic dyes and moulds and that no firm by name M/s. United Mechanical Works is existing as a member of the society. The name board of M/s. Bharat Mechanical Works, which was used to be there, found missing, which was removed on the morning of the same day, on an enquiry with the neighbours; the premises was sealed in the presence of two panchas and a copy of the panchanama was pasted on the main door of the said premises. On 16-11-1989, Shri T.P. Padmanabhan approached the SIIB's office and the officers again went to the abovesaid premises on 21-11-1989 and conducted the search of the premises in his presence and some incriminating documents were taken over under the Panchnama under the reasonable belief that they will be relevant for the purpose of investigation and enquiry being conducted. 2 Lathe machines, 1 milling machine, 4 drilling machine, 1 hacksaw cutting machine and 1 tools grinding machine were installed in the said premises. On an enquiry, Shri T.P. Padmanabhan stated he has no facility to manufacture the item, switch gear boxes and panel boxes in his said factory, and he has neither manufactured the said items at any time in the past, nor d....
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....1990, 24-1-1990 under Section 108 of the Customs Act. The statement of Shri Kamal Kumar N. Kanodia, CA, was recorded on 18-1-1990, 22-1-1990 and 21-8-1990 under the said provision. 5. The advance licence No. P/L/3226308/C/XX/13/B/89 and DEEC book No. 029436, dated 10-8-1989 were suspended on 24-7-1990 by the Dy. Chief Controller of Imports and Exports of Bombay under the Order No. F-3/84/89-90/ECA/Bom., dated 15-10-1990 on the ground that they were obtained on the basis of false, fraudulent and bogus documents in favour of non-existing unit only with a view to cheat the Government by disposing off the licence or the goods imported under DEEC for monitory gain without using the same for manufacture of export product and the purpose for which they were issued, will not be served and needs to be cancelled. They were cancelled ab initio and rendered ineffective for the import clearance of the goods from the Customs by the Dy. Chief Controller of Imports and Export of Bombay under the order dated 15-10-1990 on the ground that the firm has obtained the said licence by fraud with a view to misuse all the duty free material against the above licence and DEEC, and the licence will not....
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....contravention of Govt. of India, Import Control Order No. 17/55, dated 7-12-1955, Section 3 of the Imports and Exports Control Act 1947, which is an offence and the goods are liable for confiscation under Section 111(d) of the Customs Act and above provisions value of the goods appear to have been misdeclared with intent to evade payment of proper customs duty. In respect of the Bills of Entry No. 5595/17-10-1989 and No. 5834/18-10-1989, the weight of the goods have been misdeclared with intention to evade payment at proper customs duty, on the basis of the correct weight of the goods. The importer is unable to give any explanation for the wide variation between Gross weight and net weight in these two cases and had been agreed to pay duty on the basis of Gross weight. Both the value and the weight of the goods have been misdeclared with the intent to evade the proper amount of customs duty leviable on the goods which has rendered the goods liable for confiscation under Section 111(m) of the Customs Act. In respect of the goods already cleared, since the conditions of Notification No. 116/88-Cus. and of the DEEC Scheme, subject to which the goods were allowed clearance without paym....
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....Book and arranged for importation and clearance of the goods against the same with a clear intention to sell the goods in the market after clearance through Customs in gross violation of the process the DEEC scheme, as revealed from the statements of Shri T.P. Padmanabhan and Shri Manoharlal Gupta and the appellants. M/s. H.P. Dagha & Co. CHA, actively helped these parties by clearing/seeking to clear the goods in the name of non-existent firm despite knowing the person for whom the goods are being cleared and who has given document for clearance of the goods and to whom delivery of the goods was to be given is not the real importer and without making any efforts to ascertain the bona fides of the importer. The above persons and the firm had in relation to the goods, done or omitted to do or had abetted the doing or omissions of acts which acts or omissions appeared to have rendered the goods liable to confiscation under Section 111 of the Customs Act and they have rendered themselves liable to personal penalty under Section 112(a) of the Customs Act. Show cause cum Demand notice dated 31-10-1990 was issued calling upon them to explain why the declared value of the goods should not....
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....stt. Collector of SIIB and Mr. Amit Jain to accept the earlier statements to be true by holding threat after he was called to the office of the above authority. 7. In support of the appeal, the learned Counsel for the appellants has argued contending that Shri M.L. Gupta in para 27 of his statement given in the presence of his advocate implicates appellant by saying that on the advice of the appellant he has acted and thus make the appellant liable. In para 49, the Chartered Accountants identify M.L. Gupta. In para 51, Mr. Kanodia, Chartered Accountant, has stated that M.L. Gupta sought the documents. Page 86 of the Order-in-Original holds M.L. Gupta responsible, and not the appellant. Goods are also under-valued. In para 13, 16 and 17 of his statement, the import is accepted by Padmanabhan after initial denial and M.L. Gupta is brought into picture, and has admitted that he will pay the Customs Duty. In para 24 of the statement, Mr. Jatia is shown as the beneficiary. Mr. M.L. Gupta has approached Padmanabhan as per the impugned order. Name of Mr. Padmanabhan is taken in the statement immediately after offence while denying the earlier statement on 7-11-1989. CHA is engaged d....
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....ctly or indirectly. Mr. T.P. Padmanabhan speaks against Mr. Vinod K. Jatia as the importer and goods belonging to him and has indentified him by photograph. He has not implicated in any manner, the appellants. The impugned order goes beyond the charges of the show cause notice, wherein the charge was that "the appellants applied for and managed to obtain Advance Licence/DEEC Book in the fictitious name of M/s. UMW" and the order-in-original is that the appellants have imported the goods. The statement of CHA Shri Mulji R. Lodiaya is consistent. Giving the documents for clearance does not mean the appellants had imported the goods. Mere arrangements of import licence, as per the say of Mr. M.L. Gupta, by the appellants cannot make out any offence under the Customs Act. The appellants have stated in the statement that only adviced Mr. Padmanabhan to obtain the Advance Licence and DEEC Book for the import of the same. It does not prove that they have taken any part in the act of importation. There is no evidence that the appellants are concerned with the importation of goods. The evidence is not properly appreciated. Suspicion however grave, cannot take the place of the proof. 10.&em....
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.... goods. The statement of Shri Mulji R. Dodiya, partner of CHA M/s H.P. Dagha & Co., against the appellants, is that the documents of clearance of the goods imported were given by A.R. Gupta, Contrary to his earlier version that Shri Padmanabhan, Proprietor of M/s. UMW approached him, and asked him to arrange for the clearance of defective CRCA Sheets/coils, imported by them, against the aforesaid Advance Licence and DEEC Book cannot be accepted. He has tried to escape from the clutches of the law by naming different persons on different occasions, but failed in it, and has accepted the ownership of the goods imported by M/s. UMW. The statements of the appellants are not voluntary and is as a result of force, constant threat to assault, and using foul language. Under the affidavit, they have retracted these statements. Show cause notice is silent in this regard. No importance should be attached to that of the statement implicating them. The appellants have not taken part in the act of importation, and they have no knowledge about it. To impose penalty, it requires deliberate act and knowledge. There is no evidence that the appellants have done something or attempted to do, or omitte....
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....s narrated in the impugned order, also strengthens the statements. Now let us consider how Shri M.L. Gupta has involved the appellants. Paras 27 to 29 of the impugned order narrates the same. According to it Shri M.L. Gupta has obtained signature of T.P. Padmanabhan on the blank forms, letter heads, used to get advance licence and DEEC Book for Vinod Jatia, for arranging to issue the licence in the name of M/s. UMW, and it was got issued for Shri Vinod Jatia, who was to arrange for imports against the same and in that regard, he was to get Rs. 50 per ton and Rs. 200 per ton and was to be paid to Mr. Padmanabhan. In para 28, he has stated that the scheme to obtain bogus Advance Licence and DEEC Book in the name of M/s. UMW was thought of by his elder brother A.R. Gupta and sons Pravin Gupta, Sunil Gupta and Bipin Gupta. They have got the Advance Licence and DEEC Book issued in this manner. In May-June 1989, Shri A.R. Gupta told him about the scheme that huge profits can be earned by getting Advance Licence and DEEC Book issued in the names of actual users importing CRCA Sheets/coils against the same, clearing the same under the DEEC scheme without payment of Customs duty and selling....
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....and told him that he has given the work of import clearance on defective CRCA Sheets/coils to Shri Muljibhai of M/s. Dagha & Co. CHA, in respect of M/s. Ashish Engineering Works and some other firms. While offering the Advance Licence and DEEC Book in the name of M/s. Ashish Engineering Works, he had told him that he is going to receive more such licences, without disclosing in whose names they are standing. He has also told that he has imported Defective CRCA Sheets/coils against such name, Advance Licence and DEEC Books under which he has assigned the work of clearance of the goods to M/s. H.P. Dagha & Co. 13. The statement of Shri Mulji Raghavji Lodaya partner of H.P. Dagha & Co. CHA, who had filed all the Bills of Entry on behalf of M/s. UMW shows that the documents to arrange for clearance of the Defective CRCA Sheets/coils were given to him by the appellant Shri A.R. Gupta, whereas earlier he had told that Shri T.P. Padmanabhan had asked to arrange for clearance, and accordingly all the Bills of Entry were cleared against the Advance Licence and DEEC Book dated 10-8-1989 as per the instruction of the importer, and later on has added that the documents were given by Shri....
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.... all the documents after approaching and asking his willingness regarding the DEEC Book in their name with the understanding that Advance Licence and DEEC Book will be sold in the market and profit will be shared. Accordingly, they were sold to Vinod Jatia. They got a Chartered Accountants certificate certifying the past export. It was accepted by JCCIE without verifying the details and said that Advance Licence was fraudulently obtained from the above authority with our intention to exploit. Further, he has added that this scheme of getting Advance Licence issue in the DEEC scheme and selling out the imported material cleared free of duty under the said scheme in the local market, was discussed by his son Pravin Gupta with him after thinking over it and discussing with his son, Shri Bipin Gupta and considering the prospects of huge profits, they agreed to the same. He has further stated about the approaching of the parties manufacturing Steel related items and with their agreement obtained Advance Licence/DEEC Book in their names for import of defective CRCA Sheets/coils which was sold to Vinod Jatia. They successfully handled such cases under good profit. Further he has stated th....